Audio 5:56
BHP Billiton boss steps down as company posts big fall in half year profit

Sue LanninUpdated
Wed Feb 20 13:32:00 EST 2013

Big miner, BHP Billiton, says its chief executive, Marius Kloppers, is stepping down. The company made the surprise announcement as it released its latest profit results which showed that net profit fell by more than half to USD$4.2 billion for the six months to the end of December. The head of BHP Billiton's copper business, Andrew Mackenzie, will take over in May.

Transcript

EMILY BOURKE: It's posted a fall in net profit but the big news from the big miner, BHP Billiton today is the retirement of its Chief Executive Marius Kloppers.

Mr Kloppers has been at the helm of the company for nearly six years.

But he and the board now say it's the right time to implement a succession plan as the company revealed its net profit fell by more than half to US$4.2 billion for the six months to the end of December.

The successor to Mr Kloppers comes from within the company. He's the head of BHP Billiton's copper business, Andrew Mackenzie. He'll take over in May.

Resources Reporter, Sue Lannin, has been at the BHP Billiton press conference this morning and joins me now.

Sue, why is Mr Kloppers stepping down now?

SUE LANNIN: Well yes, it was a surprise this morning. It came out when the results were announced, as you just mentioned, but in fact it has been in trend for some time, there's been speculation for some time that Mr Kloppers would step down.

That's because he's overseen some big deals that didn't go through while at the helm of BHP Billiton. BHP Billiton made an audacious, some may say, takeover bid for Rio Tinto a few years ago at the height of the stock market boom. They had to withdraw that bid because then there was a global financial crisis and it didn't make sense.

He's also overseen other deals that haven't worked out. Also, he oversaw the purchase of the shale gas assets in the US and the company had to take a huge multi-billion dollar write-down last year. So at the end of it, no surprise really.

And let's have a quick look at the profit result. As you said, down by more than half. That's very much because of the high Australian dollar and fluctuating commodity prices. So net profit after tax came in at US$4.2 billion. Let's have a listen to what Marius Kloppers had to say about his retirement.

MARIUS KLOPPERS: Retirement decisions are always difficult and they're especially difficult when you've got one of the best jobs in the world. They are a little easier if you've got people of the quality of Andrew working with you.

But after spending time with my family and talking then to Jack and the board after that, and reflecting on my 20 years plus at the company, including nearly six years as chief executive, now is the time for me to pass the baton on and for Andrew to take us to greater heights.

Sue, did the timing of this have anything to do with the movements of Rio and the recent appointment of Sam Walsh.

SUE LANNIN: Yes, I put that question to Mr Kloppers and they all smiled and said that it had nothing to do with the movements at Rio Tinto. Of course the former chief executive at Rio Tinto, Tom Albanese, had to resign in January because of huge write-downs.

The company had to take on some its businesses. Marius Kloppers said that Tom Albanese was a good friend but the timing of his decision to depart was completely incidental. But at the time, when I spoke to analysts back in January, they told me they thought it, Tom Albanese's departure, would actually put more pressure on Marius Kloppers.

EMILY BOURKE: Well what do we know about the new CEO Andrew Mackenzie?

SUE LANNIN: Yes well Andrew Mackenzie was actually appointed by Marius Kloppers. He's a 30 year veteran of the oil and gas, petrochemicals and resources industry. And he's actually been heading BHP Billiton's copper business. So he's an internal appointment, like Sam Walsh was at Rio Tinto. He said that he's very, very focused on productivity. He was beaming and clearly very happy to be taking the job and also he said he was going to be delighted to be moving to Melbourne. So let's have a listen to Andrew Mackenzie.

ANDREW MACKENZIE: Of course I'm greatly honoured that the board has chosen me to be the next Chief Executive Officer of BHP Billiton. BHP Billiton is one of the world's truly great companies. So this appointment humbles me deeply.

I too have had the pleasure and privilege of working with Jack and the board and Marius and the many thousands of hugely talented BHP Billiton employees since Marius persuaded me to join the company five years ago.

I'm really pleased he succeeded and that he was so persistent and patient. But I'm also really in his debt because since I arrived he has prepared me incredibly well for the possibility that I might one day take over from him.

EMILY BOURKE: That's the new head of BHP Billiton, Andrew Mackenzie. Sue Lannin, of course the topic of the mining tax has been a hot one recently. Was the board asked whether the company had paid any mining tax to date?

SUE LANNIN: Yes. In fact they were and Marius Kloppers actually said he didn't know because he didn't have, the Chief Financial Officer actually wasn't there. But he did say that the tax would operate as you would expect. So when commodity prices are high, you would pay the tax.

When commodity prices were low, you wouldn't pay the tax. But we have actually asked BHP Billiton and the BHP Billiton Chief Financial Officer has confirmed that BHP Billiton paid $77 million. That's in the first six months of the mining tax. Now we know last week Rio Tinto said that they had not paid any mining tax.

Also yesterday Arrium, the former OneSteel, said it hadn't paid any mining tax. It's now got iron ore mines. So we know that BHP Billiton has paid $77 million of the $126 million that the Federal Government got in the first six months of its operation.

And very much, BHP revenues fell, iron ore prices fluctuated but they have come back towards the end of the year so that's one of the reasons why BHP Billiton would have paid the mining tax.